On February 27, 2009, Citi announced a fourth quarter 2008 goodwill impairment charge and a further impairment to the intangible asset
related to Nikko Asset Management. These pre-tax charges of approximately $9.9 billion are not reflected in the fourth quarter 2008 press
release, financial supplement and investor presentation, each dated January 16, 2009. For updated financial information, please refer to
the Citigroup, Inc. 2008 Form 10-K filed with the U.S. Securities and Exchange Commission on February 27, 2009.
CITI REPORTS FOURTH QUARTER NET LOSS OF $8.29 BILLION, LOSS PER SHARE OF $1.72
NET LOSS FROM CONTINUING OPERATIONS OF $12.14 BILLION, LOSS PER SHARE OF $2.44,
PRIMARILY DUE TO WRITE-DOWNS AND LOSSES IN SECURITIES AND BANKING, HIGHER CREDIT
LOSSES, ADDITIONS TO LOAN LOSS RESERVES, AND RESTRUCTURING COSTS RELATED TO
HEADCOUNT REDUCTIONS
PROGRESS ON LOWERING EXPENSES, HEADCOUNT AND ASSETS
CONTINUED CAPITAL AND STRUCTURAL LIQUIDITY STRENGTH
FULL YEAR 2008 REVENUES OF $52.8 BILLION, NET LOSS OF $18.72 BILLION
New York, NY, January 16, 2009 — Citigroup Inc. (NYSE: C) today reported a net loss for the 2008 fourth quarter
of $8.29 billion, or $1.72 per share, based on 5,347 million shares outstanding. Revenues of $5.6 billion were
affected by write-downs and losses in Securities and Banking. Results also include $6.1 billion in net credit losses
and a $6.0 billion net loan loss reserve build.
For the full year 2008, Citigroup reported a net loss of $18.72 billion, or $3.88 per share. See Schedule C for full
year business segment results.
Key Items
Results reflect the negative impact from $7.8 billion in revenue marks in Securities and Banking, a $5.3 billion
downward credit value adjustment on derivative positions, excluding monolines, $2.5 billion of losses in private
equity and equity investments, $2.0 billion of restructuring costs, and a $6.0 billion net loan loss reserve build.
Deposit base remained stable compared to the third quarter 2008 despite the challenging environment.
Net interest margin increased 73 basis points versus the fourth quarter 2007.
Expenses excluding restructuring and repositioning charges were down 4% since the third quarter 2008 and
14% since the fourth quarter 2007.
Headcount reduced by approximately 29,000 since the third quarter 2008 and approximately 52,000 in the full
year 2008.
Increased capital position by issuing $45 billion of preferred stock and warrants to the U.S. Treasury as part of
the TARP. The Tier 1 capital ratio was approximately 11.8%.
Closed sales of the German retail banking operations and Citi Global Services Limited for after-tax gains of
$3.9 billion and $192 million, respectively.
The loss sharing program with the U.S. Government, closed on January 15, 2009, reduces risk and lowers the
regulatory capital requirement on $301 billion of covered assets. Additionally, Citi closed on the issuance of $7.1
billion of liquidation preference perpetual preferred stock and warrants to the U.S. Treasury and FDIC.
On January 13, 2009, Citi announced the Morgan Stanley Smith Barney Joint Venture. Citi will exchange Smith
Barney for a 49% stake in the JV and a $2.7 billion cash payment. Upon closing, expected to occur in the second
half of 2009, this transaction will result in a pre-tax gain of approximately $9.5 billion (approximately $5.8 billion
after-tax), an increase to tangible common equity of approximately $6.5 billion and an increase to Tier 1 capital of
approximately $6.4 billion.
Management Comment
“Our results continued to be depressed by an unprecedented dislocation in capital markets and a weak economy.
However, a number of our core customer franchises continued to perform well as Citi’s customers remain active
1
and engaged with us. We continued to make progress on our primary goal in 2008—which was to get fit. We
significantly strengthened Tier 1 and structural liquidity, we reduced our balance sheet, expenses, and headcount.
We also made significant progress in reducing risk from our balance sheet. Our legacy assets declined to
approximately $300 billion, over $300 billion of assets are now covered by a loss sharing arrangement, and we
added $14 billion to our loan loss reserves. We expect reduced volatility from marks in 2009 as a result of actions
we’ve taken to reduce risk, and reclassify certain securities and loans from trading and available or hold for sale to
hold to maturity or held for investment.
“Today, we announced that we would separate the company, for management purposes, into two separate
businesses—Citicorp and Citi Holdings. We are setting out a clear roadmap to restore profitability and enable us to
focus on maximizing the value of Citi and strengthening TCE.
“We are committed to helping the financial markets recover as quickly as possible. To accelerate that recovery Citi
is putting the TARP capital it has received to work to support the U.S. economy and consumers - expanding the
flow of credit to U.S. households and businesses responsibly and on competitive terms.
“I want to recognize the hundreds of thousands of Citi colleagues who have kept their focus on our clients and our
business throughout what has been an enormously disruptive and distracting period in our industry. Despite
unprecedented turbulence in the global financial markets, they have conducted themselves with the highest
professionalism and integrity. Because of their work and dedication, I have no doubt we will emerge from the
current environment stronger, smarter, and better positioned to realize the full earnings power of this great
franchise,” said Vikram Pandit, Chief Executive Officer of Citi.
Citi Results
Fourth Quarter Revenues
%
2008
2,843
Institutional Clients Group
Global Wealth Management
7,836
Change
2008
2007
Change
(27)%
$(610)
$934
NM
(22)
(1,678)
(578)
NM
(10,791)
24
(9,457)
(10,723)
3,464
(18)
29
524
(94)
NM
(421)
(188)
NM
$(12,137)
$(10,031)
254
Corporate/Other
Total Citi From Continuing Operations
(369)
$5,595
$6,419
(13)%
3,843
Discontinued Operations
Total Citi
12
(21)%
198
$(8,294)
$(9,833)
16%
(23)%
$(2,321)
$(689)
NM
$(11,019)
$(8,947)
Europe, Middle East and Africa
2,989
(1,562)
NM
(332)
(3,296)
Latin America
2,687
3,641
(26)
Asia
1,986
5,398
North America
%
(6)
(8,191)
Consumer Banking
7,479
6,077
Global Cards (Managed)
$6,279
7,038
Global Cards
2007
$4,612
(In Millions of Dollars, except EPS)
Fourth Quarter Net Income
Corporate/Other
Total Citi From Continuing Operations
254
(369)
$5,595
$6,419
6
(63)
(371)
NM
(421)
(188)
$(12,137)
$(10,031)
(13)%
3,843
Discontinued Operations
Total Citi
939
1,461
90
(99)
NM
NM
(21)%
198
$(8,294)
$(9,833)
16%
Earnings per Share from Continuing Operations
$(2.44)
$(2.03)
(18)%
Earnings per Share
$(1.72)
$(1.99)
16%
NM Not Meaningful.
2
FOURTH QUARTER SUMMARY
• Revenues were $5.6 billion, down 13%. Revenues across all businesses reflect the impact of a difficult
economic environment and weak capital markets.
– Global Cards GAAP revenues declined 27%, mainly due to lower securitization results in North America, the
absence of a $584 million pre-tax gain on Visa and MasterCard shares recorded in the prior-year period, and
the impact of foreign exchange. Global Cards managed revenues declined 6%. Average managed loans
declined 2%, due to lower purchase sales in North America and the impact of foreign exchange. North
America managed revenues increased 4%.
– Consumer Banking revenues declined 22%, driven by a 47% decline in investment sales, lower mortgage
servicing revenue, the impact of foreign exchange, lower volumes and spread compression.
– In the Institutional Clients Group, Securities and Banking revenues were negative $10.6 billion, mainly due to
net losses and write-downs of $7.8 billion (see detail in Schedule D), a $5.3 billion downward credit value
adjustment on derivative positions, excluding monolines, as well as losses of $2.5 billion in private equity and
equity investments.
– Transaction Services revenues were up 4% to $2.4 billion, reflecting double-digit revenue growth in Treasury
and Trade Solutions (“TTS”). Average deposits and other customer liability balances increased 5%, driven by
North America. Assets under custody declined 18%, principally due to declining equity markets.
– Global Wealth Management revenues declined 18%, reflecting the adverse impact of market conditions on
capital markets and investment revenues, particularly in North America and Asia. Revenues also included an
$87 million write-down on auction rate securities related to the August 7, 2008 settlement. Average loans
and deposits declined 3% and 4%, respectively, and client assets under fee-based management declined
35%. The decline in client assets under fee-based management was mainly due to lower asset valuations,
reflecting declining market values.
• Operating expenses were $15.3 billion, down 5%, reflecting benefits from re-engineering efforts and the impact
of foreign exchange. Expenses included $2.0 billion in restructuring charges and a $563 million intangible asset
impairment charge related to Nikko Asset Management. Expenses in the prior-year period included $539 million
in repositioning charges and a $306 million Visa-related litigation reserve. Excluding all these items, expenses
declined 16%.
• Credit costs of $12.7 billion, up 66%, consisted mainly of $6.1 billion in net credit losses, a $6.0 billion net loan
loss reserve build, and $594 million of policyholder benefits and claims. Net credit losses increased $2.6 billion,
primarily driven by Consumer Banking and Cards in North America, and Securities and Banking. The
incremental net loan loss reserve build of $2.3 billion was mainly due to a $1.2 billion loan loss reserve build
related to LyondellBasell recorded in Securities and Banking. The increase in policyholder benefits and claims
was due to a change in the accounting estimate for future policy benefits in Primerica Financial Services.
• Taxes. The effective tax rate on continuing operations was 44.6% versus 42.7% in the prior-year period. The
current quarter’s taxes included a $994 million tax benefit related to the restructuring of the Japan Consumer
Finance operations.
• Capital Position. During the quarter, Citi issued $45 billion of preferred stock and warrants to the U.S. Treasury
as part of the TARP. The Tier 1 capital ratio was approximately 11.8%.
• Goodwill. In light of recent market and economic events and today’s restructuring announcement, Citi is
continuing to review goodwill to determine whether an impairment results.
3
GLOBAL CARDS
Fourth Quarter Revenues
(In Millions of Dollars)
North America
%
Fourth Quarter Net Income
%
2008
2007
Change
2008
2007
Change
$2,640
$3,678
(28)%
$(371)
$322
NM
Europe, Middle East and Africa
537
565
(5)
(138)
120
NM
Latin America
869
1,218
(29)
(154)
251
NM
Asia
566
818
(31)
53
241
(78)
$4,612
$6,279
$934
NM
Total Global Cards
(27)%
$(610)
NM Not Meaningful.
Fourth Quarter Revenues
(In Millions of Dollars)
North America GAAP Revenues
%
2008
2007
Change
$2,640
$3,678
(28)%
Impact of Securitization Activity
2,426
1,200
North America Managed Revenues
$5,066
$4,878
NM
4%
NM Not Meaningful.
• Revenues
– Global Cards GAAP revenues declined 27%, mainly due to lower securitization results in North America, the
absence of a $584 million pre-tax gain on Visa and MasterCard shares recorded in the prior-year period, and
the impact of foreign exchange. Global Cards managed revenues declined 6%.
– Average managed loans declined 2%, due to lower purchase sales in North America and the impact of
foreign exchange.
– In North America, GAAP revenues declined 28%, as lower securitization revenues primarily reflected the
impact of higher credit losses in the securitization trusts. Managed revenues increased 4%, driven by a 97
basis point increase in the managed net interest margin to 11.04%, partially offset by the absence of a prioryear gain on the sale of MasterCard shares. The improvement in the managed net interest margin reflects
higher interest and fee revenues due to higher revolving balances, as well as lower cost of funds. Purchase
sales declined 15%, reflecting lower spending across nearly all portfolios. Average managed loans declined
1%, due to lower purchase sales and balance transfer volumes, partially offset by a decline in payment rates
across all portfolios.
– In EMEA, revenues declined 5%, and purchase sales and average loans were down 21% and 7%,
respectively, as growth in revenues, sales and loans was more than offset by the impact of foreign exchange.
– In Latin America, revenues declined 29%, due to the absence of a gain on Visa shares recorded in the prioryear period, as well as the impact of foreign exchange. Purchase sales and average loans declined 15% and
13%, respectively, also reflecting the impact of foreign exchange.
– In Asia, revenues declined 31%, purchase sales were down 7% and average loans were up 1%, as growth in
revenues, sales and loans was more than offset by the impact of foreign exchange. The decline in revenues
also reflects the absence of a gain on Visa shares recorded in the prior-year period.
• Expenses
– Expenses declined 14%, primarily due to the absence of a $293 million Visa-related litigation reserve
recorded in the prior-year period, as well as the impact of foreign exchange. The decline in expenses was
also driven by lower compensation and marketing costs, reflecting a continued slowdown in acquisition
marketing, partially offset by a $127 million restructuring charge.
• Credit Costs
– In North America, credit costs increased 34%, reflecting higher net credit losses, up 37% or $242 million, and
a $172 million incremental net loan loss reserve build. Higher credit costs reflected a continued weakening of
leading credit indicators and trends in the macro-economic environment, including rising unemployment,
higher bankruptcy filings, and the housing market downturn. Higher credit costs also reflected a significant
increase in the rate at which customers became delinquent, as well as the continued acceleration in the rate
4
at which delinquent customers advanced to write-off. The managed net credit loss ratio increased 268 basis
points to 6.98% in the Citi branded portfolio and 340 basis points to 9.86% in the retail partners portfolio.
– In EMEA, credit costs increased $328 million, reflecting higher net credit losses, up $154 million, and a $174
million incremental net loan loss reserve build. Higher credit costs reflected the impact of purchase
accounting adjustments recorded in the prior-year period relating to the Egg acquisition, as well as continued
credit deterioration in the UK, Spain, and Greece. The net credit loss ratio increased 445 basis points to
5.17%.
– In Latin America, credit costs increased 89%, reflecting higher net credit losses, up 37% or $115 million, and
a $231 million incremental net loan loss reserve build. Higher credit costs were driven by continued
deterioration in the credit environment in Mexico and Brazil. The net credit loss ratio increased 517 basis
points to 14.18%.
– In Asia, credit costs increased 54%, reflecting higher net credit losses, up 32% or $39 million, and a $46
million incremental net loan loss reserve build. Higher credit costs reflected continued deterioration, primarily
in India. The net credit loss ratio increased 96 basis points to 4.02%.
• Net Income
– The $610 million net loss was mainly driven by the significant increase in credit costs.
CONSUMER BANKING
Fourth Quarter Revenues
(In Millions of Dollars)
North America
Europe, Middle East and Africa
Latin America
Asia
Total Consumer Banking
%
2008
2007
Change
$3,604
$4,545
(21)%
512
697
(27)
Fourth Quarter Net Income
2008
%
2007
Change
$(2,165)
$(920)
NM
(233)
(64)
NM
858
1,172
(27)
(76)
206
NM
1,103
1,422
(22)
796
200
NM
$6,077
$7,836
$(578)
NM
(22)%
$(1,678)
NM Not Meaningful.
Revenues declined 22%, driven by a 47% decline in investment sales, lower mortgage servicing revenue, the
impact of foreign exchange, lower volumes and spread compression. The decline in investment sales was driven
by a general slowdown in global capital market activities. Average loans and deposits were down 6% and 7%,
respectively. Expenses declined 3%, as benefits from re-engineering efforts and the impact of foreign exchange
more than offset $384 million in restructuring charges. Credit costs increased 23% or $1.1 billion, reflecting a
significant increase in net credit losses, up $1.7 billion. Credit costs also included a $2.3 billion net loan loss
reserve build, mainly in North America across all portfolios, including additional reserves for increased numbers of
loan modification adjustments to customer loans across all product lines.
• North America
– Revenues declined 21%, mainly driven by lower mortgage servicing revenue and the absence of gains on the
sale of assets. Average loans were down 5%, driven by a decline in residential real estate originations and
loans, and deposits were up 3%.
– Credit costs increased 21% and included higher net credit losses, up $1.6 billion, and a $2.0 billion net loan
loss reserve build across all portfolios, including additional reserves for increased numbers of loan
modification adjustments to customer loans across all product lines. The loan loss reserve build was $766
million lower than the prior-year period. Higher credit costs reflected a weakening of leading credit indicators,
including a continued rise in delinquencies in first and second mortgages, personal loans and auto loans.
Credit costs also reflected trends in the macro-economic environment, including housing market declines.
The net credit loss ratio increased 222 basis points to 3.62%. The net loss of $2.2 billion was mainly driven
by lower revenues, a $226 million restructuring charge, and higher credit costs.
• Europe, Middle East and Africa
– Revenues declined 27%, as average loans and deposits were down 14% and 28%, respectively. The decline
in average deposits was primarily due to the impact of foreign exchange, as well as customer actions to align
deposits with government insurance programs, mainly in the UK. Investment sales and assets under
management declined mainly due to adverse market conditions.
5
– Credit costs increased 3%, due to higher net credit losses, up 14% or $25 million. The net loan loss reserve
build of $83 million was $16 million lower than the prior-year period. Higher credit costs reflected continued
credit deterioration, particularly in Spain and Greece. The net credit loss ratio increased 95 basis points to
3.75%. Lower revenues and the increase in credit costs led to a net loss of $233 million.
• Latin America
– Revenues decreased 27%, reflecting the impact of foreign exchange, the absence of a gain on Visa shares
recorded in the prior-year period, and the divestiture of the Chile Consumer Banking operations, which closed
in January 2008. Average loans and deposits were down 3% and 13%, respectively, due to the impact of
foreign exchange.
– Credit costs nearly doubled, due to an increase in net credit losses, up 32% or $35 million, and a $94 million
incremental net loan loss reserve build. Higher credit costs reflected a continued deterioration in Mexico,
Brazil, and Colombia. The net credit loss ratio increased 108 basis points to 4.04%. Lower revenues and a
significant rise in credit costs led to a net loss of $76 million.
• Asia
– Excluding Japan Consumer Finance, revenues declined 20%, mainly driven by a significant decline in
investment revenues, as investment sales declined 83%, reflecting a continued decline in equity markets
across Asia. The declines in average loans and deposits of 12% and 9%, respectively, were mainly due to
the impact of foreign exchange. Credit costs more than doubled, driven by higher net credit losses, up 57%
or $59 million, and a $71 million incremental net loan loss reserve build. Higher credit costs were mainly
driven by continued deterioration in the credit environment in India. The net credit loss ratio increased 66
basis points to 1.48%. Net income declined 35% to $251 million.
– In Japan Consumer Finance, revenues declined 47%, reflecting a decline in net interest revenues as the
portfolio continues to be managed down. Revenues also included a $174 million pre-tax charge to increase
reserves for estimated losses due to customer settlements. This compares to a $188 million pre-tax charge
recorded in the prior-year period. Net income of $545 million reflected a tax benefit of $750 million, mainly
due to the restructuring of legal vehicles.
INSTITUTIONAL CLIENTS GROUP
Fourth Quarter Revenues
(In Millions of Dollars)
North America
Europe, Middle East and Africa
Latin America
Asia
Securities and Banking
North America
Europe, Middle East and Africa
Latin America
Asia
Transaction Services
Institutional Clients Group
2008
2007
%
Change
Fourth Quarter Net Income
2008
2007
%
Change
$(11,331)
988
561
(808)
$(11,889)
(3,762)
812
1,749
5%
NM
(31)
NM
$(8,784)
(240)
129
(1,283)
$(8,785)
(3,543)
334
604
-93
(61)%
NM
$(10,590)
$(13,090)
19%
$(10,178)
$(11,390)
11%
$591
818
336
654
$468
779
341
711
26%
5
(1)
(8)
$71
265
108
277
$50
171
132
314
42%
55
(18)
(12)
$2,399
$2,299
4%
$721
$667
8%
$(8,191)
$(10,791)
24%
$(9,457)
$(10,723)
12%
NM Not Meaningful.
• Securities and Banking
– Securities and banking revenues were negative $10.6 billion due to substantial write-downs and losses.
– Fixed income markets revenues of negative $13.4 billion reflected:
A $5.3 billion downward credit value adjustment on derivative positions, excluding monolines. The
continued disruption in the credit markets caused counterparty credit spreads to widen, while the TARP
capital injection contributed to the tightening of Citi’s credit spreads. This unusual divergence led to the
downward adjustment.
6
Net write-downs of $4.6 billion on sub-prime related direct exposures. These exposures on December
31, 2008, were comprised of approximately $2.0 billion of gross lending and structuring exposures and
approximately $12.0 billion of net ABS CDO super senior exposures (ABS CDO super senior gross
exposures of $ 18.9 billion). On September 30, 2008, these exposures were comprised of
approximately $3.3 billion of gross lending and structuring exposures and approximately $16.3 billion of
net ABS CDO super senior exposures (ABS CDO super senior gross exposures of $25.7 billion). See
details in Schedule E.
Private equity and equity investments losses of $2.5 billion.
Write-downs of $1.3 billion, net of hedges, on Alt-A mortgages.
Write-downs of $1.1 billion on SIV assets.
Write-downs of $991 million on commercial real estate positions.
Downward credit value adjustments of $897 million related to exposure to monoline insurers.
Write-downs of $307 million on ARS proprietary positions and $87 million on positions related to the
August 7, 2008 settlement.
Negative revenues were partially offset by a $2.0 billion gain related to the inclusion of Citi's credit
spreads in the determination of the market value of those liabilities for which the fair value option was
elected, as well as strong revenues in the interest rate and currency trading business.
– Equity markets revenues decreased by $1.4 billion to negative $650 million. Revenues generated in cash
trading and prime broker were offset by losses in derivatives, convertibles, and proprietary trading.
– Lending revenues increased $1.1 billion to $2.1 billion, primarily driven by gains on credit default swap
hedges, partially offset by write-downs of $382 million, net of underwriting fees, on funded and unfunded
highly leveraged finance commitments.
– Net investment banking revenues declined 79% to $275 million.
Advisory revenues were $236 million, down 57%, reflecting continued difficult market conditions.
Equity underwriting revenues were $26 million, down $435 million, reflecting continued volatility in the
equity markets and extremely low global volumes.
Debt underwriting revenues were $56 million, down 86%, primarily driven by net write-downs of $213
million of highly leveraged finance commitments and lower market volumes overall.
– North America results reflect write-downs on sub-prime related direct exposures, Alt-A mortgages, and
commercial real estate positions, as well as the negative effect from the downward credit value adjustment on
derivative positions, excluding monolines. Negative revenues were partially offset by gains on credit default
swap hedges and a strong performance in currency trading. EMEA revenues increased $4.8 billion, mainly
because sub-prime related direct exposures are now managed primarily in North America after being
transferred in the second quarter 2008 from EMEA to North America. EMEA revenues also reflected strong
results in currency trading as well as local markets sales and trading. Latin America revenues declined 31%,
reflecting unfavorable market conditions mainly related to equities trading and the mark-to-market impact of
wider credit spreads, partially offset by improvements in local markets sales and trading, and lending. Asia
revenues declined $2.6 billion reflecting losses on proprietary investments and difficult market conditions,
partially offset by strong performance in rates and currencies.
– Expenses decreased 12%, driven by a significant decrease in salary and incentive compensation due to
headcount reductions and cost cutting offset by a $563 million Nikko Asset Management intangible asset
impairment charge and a $457 million restructuring charge.
– Credit costs increased significantly, mainly driven by a $2.1 billion incremental net loan loss reserve build.
The loan loss reserve build reflected a $1.5 billion incremental net build to loan loss reserves for specific
counterparties, which included $1.2 billion for LyondellBasell, as well as a $0.6 billion incremental net build to
reflect a general weakening in the corporate credit environment.
• Transaction Services
– Transaction Services revenues were up 4% to $2.4 billion, reflecting double-digit revenue growth in TTS.
Average deposits and other customer liability balances increased 5%, driven by North America. Assets
under custody declined 18% due to declining equity markets.
7
TTS revenues were up 15%, driven by growth in liabilities and new deal wins. Securities Services
revenues decreased 15%, mainly driven by lower assets under custody valuations and the impact of
market disruption on volumes and balances.
North America revenue growth of 26% was primarily due to higher interest revenues from balances. In
EMEA, revenues increased 5% driven largely by increased customer liability balances. Latin America
revenues declined by 1%. In Asia, revenues were down 8%, mainly due to the absence of a gain on
Visa shares recorded in the prior-year period. Revenues also reflected lower Securities Services fees
due to a decline in equity valuations and the impact of foreign exchange.
– Expenses declined 2%, driven by headcount reduction and reengineering benefits, as well as the impact of
foreign exchange. Net income increased 8% to $721 million with strong growth in North America and EMEA.
GLOBAL WEALTH MANAGEMENT
(In Millions of Dollars)
North America
Europe, Middle East and Africa
Latin America
Asia
Global Wealth Management
Fourth Quarter Revenues
2008
2007
$2,175
$2,509
134
159
63
98
471
698
$2,843
$3,464
%
Change
(13)%
(16)
(36)
(33)
(18)%
Fourth Quarter Net Income
2008
2007
$230
$386
14
20
(1)
16
(214)
102
$29
$524
%
Change
(40)%
(30)
NM
NM
(94)%
NM Not Meaningful.
– Global Wealth Management revenues declined 18%, reflecting the adverse impact of market conditions on
capital markets and investment revenues, particularly in North America and Asia. Revenues also included a
$87 million write-down related to the ARS settlement. Average loans and deposits declined 3% and 4%,
respectively, and client assets under fee-based management declined 35%. The decline in client assets
under fee-based management was mainly due to lower asset valuations reflecting negative market action.
In North America, revenues declined 13%, as lower investments and capital markets revenues due to
difficult market conditions were partially offset by an increase in banking and lending revenues.
Average deposits grew 7%, driven by the re-balancing of customer portfolios into more liquid assets. In
EMEA, revenues declined 16%, mainly due to lower management fees and transactional revenue. In
Latin America, revenues declined 36%, also reflecting the impact of market conditions. In Asia,
revenues declined 33%, as market conditions continued to be challenging, leading to a significant
decline in investments and capital markets revenues.
– Expenses declined 2%, as lower compensation costs were partially offset by a $306 million restructuring
charge. Credit costs increased $160 million, driven by a $118 million incremental net loan loss reserve build,
mainly in North America residential mortgages. Net income declined significantly to $29 million.
CORPORATE/OTHER
Corporate/Other revenues of $254 million were mainly driven by a $263 million pre-tax gain on sale of Citi Global
Services Limited and effective hedging activities. The net loss of $421 million reflected higher expenses mainly due
to restructuring charges, and higher taxes held at Corporate.
DISCONTINUED OPERATIONS
Discontinued operations income of $3.8 billion primarily reflected a $3.9 billion after-tax gain on the sale of Citi’s
German retail banking operations, including the fourth quarter impact of a benefit of a currency hedge put in place
post-signing.
A reconciliation of non-GAAP financial information contained in this press release is on page 16.
8
Gary Crittenden, Chief Financial Officer, will host a conference call today at 8:00 AM (EST). A live webcast of the presentation,
as well as financial results and presentation materials, will be available at http://www.citigroup.com/citigroup/fin. A replay of the
webcast will be available at http://www.citigroup.com/citigroup/fin/pres.htm. Dial-in numbers for the conference call are as
follows: (877) 700-4194 in the U.S.; (706) 679-8401 outside of the U.S. The passcode for all numbers is 78218371.
Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than
100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and
services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth
management. Citi’s major brand names include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Nikko.
Additional information may be found at www.citigroup.com or www.citi.com.
Additional financial, statistical, and business-related information, as well as business and segment trends, is included in a
Financial Supplement. Both the earnings release and the Financial Supplement are available on Citi’s website at
www.citigroup.com or www.citi.com.
Certain statements in this document are “forward-looking statements” within the meaning of the Private Securities Litigation
Reform Act. These statements are based on management’s current expectations and are subject to uncertainty and changes in
circumstances. Actual results may differ materially from those included in these statements due to a variety of factors. More
information about these factors is contained in Citigroup’s filings with the Securities and Exchange Commission.
Contacts:
Press: Shannon Bell
Michael Hanretta
(212) 793-6206
(212) 559-9466
Equity Investors:
Scott Freidenrich
Fixed Income Investors: Maurice Raichelson
9
(212) 559-2718
(212) 559-5091
Schedule A
REGIONAL RESULTS
(In Millions of Dollars)
Global Cards
Consumer Banking
Institutional Clients Group
Global Wealth Management
North America
Fourth Quarter Revenues
%
2008
Change
2007
$2,640
$3,678
(28)%
3,604
4,545
(21)
(10,740) (11,421)
6
2,175
2,509
(13)
$(2,321)
$(689)
NM
Fourth Quarter Net Income
%
2008
Change
2007
$(371)
$322
NM
(2,165)
(920)
NM
(8,713)
(8,735)
-230
386
(40)
$(11,019)
$(8,947)
(23)%
Global Cards
Consumer Banking
Institutional Clients Group
Global Wealth Management
Europe, Middle East and Africa (EMEA)
$537
512
1,806
134
$2,989
$565
697
(2,983)
159
$(1,562)
(5)%
(27)
NM
(16)
NM
$(138)
(233)
25
14
$(332)
Global Cards
Consumer Banking
Institutional Clients Group
Global Wealth Management
Latin America
$869
858
897
63
$2,687
$1,218
1,172
1,153
98
$3,641
(29)%
(27)
(22)
(36)
(26)%
$(154)
(76)
237
(1)
$6
$251
206
466
16
$939
NM
NM
(49)
NM
(99)%
Global Cards
Consumer Banking
Institutional Clients Group
Global Wealth Management
Asia
$566
1,103
(154)
471
$1,986
$818
1,422
2,460
698
$5,398
(31)%
(22)
NM
(33)
(63)%
$53
796
(1,006)
(214)
$(371)
$241
200
918
102
$1,461
(78)%
NM
NM
NM
NM
Corporate/Other
Total Citi from Continuing Operations
254
$5,595
(369)
$6,419
NM
(13)%
(421)
$(12,137)
3,843
Discontinued Operations
Total Citi
$(8,294)
NM Not Meaningful.
10
$120
(64)
(3,372)
20
$(3,296)
(188)
$(10,031)
198
$(9,833)
NM
NM
NM
(30)
90%
NM
(21)%
NM
16%
Schedule B
FULL YEAR REGIONAL RESULTS
(In Millions of Dollars)
Full Year Revenues
Full Year Net Income
Global Cards
Consumer Banking
Institutional Clients Group
Global Wealth Management
North America
2008
$10,299
16,627
(22,477)
9,295
$13,744
2007
$13,893
16,991
(3,040)
9,790
$37,634
%
Change
(26)%
(2)
NM
(5)
(63)%
Global Cards
Consumer Banking
Institutional Clients Group
Global Wealth Management
Europe, Middle East and Africa (EMEA)
$2,326
2,596
5,592
604
$11,118
$1,955
2,485
4,235
543
$9,218
19%
4
32
11
21%
$(117)
(475)
(1,102)
84
$(1,610)
$232
(122)
(1,900)
77
$(1,713)
NM
NM
42
9
6%
Global Cards
Consumer Banking
Institutional Clients Group
Global Wealth Management
Latin America
$5,017
3,959
3,812
357
$13,145
$4,803
4,185
4,206
373
$13,567
4%
(5)
(9)
(4)
(3)%
$491
300
1,292
56
$2,139
$1,233
660
1,630
72
$3,595
(60)%
(55)
(21)
(22)
(41)%
Global Cards
Consumer Banking
Institutional Clients Group
Global Wealth Management
Asia
$2,565
5,470
5,256
2,345
$15,636
$2,400
5,797
8,339
2,292
$18,828
7%
(6)
(37)
2
(17)%
$321
1,151
406
(17)
$1,861
$496
839
2,848
410
$4,593
(35)%
37
(86)
NM
(59)%
Corporate/Other
Total Citi from Continuing Operations
(850)
$52,793
(752)
$78,495
(13)
(33)%
2008
$(529)
(4,529)
(20,471)
968
$(24,561)
2007
$2,713
780
(6,733)
1,415
$(1,825)
%
Change
NM
NM
NM
(32)
NM
(954)
$(23,125)
4,410
Discontinued Operations
Total Citi
$(18,715)
NM Not Meaningful.
11
(1,661)
43
$2,989
NM
628
NM
$3,617
NM
Schedule C
FULL YEAR SEGMENT RESULTS
(In Millions of Dollars)
Full Year Revenues
Full Year Net Income
North America
Europe, Middle East and Africa (EMEA)
Latin America
Asia
Global Cards
2008
$10,299
2,326
5,017
2,565
$20,207
2007
$13,893
1,955
4,803
2,400
$23,051
%
Change
(26)%
19
4
7
(12)%
North America
Europe, Middle East and Africa (EMEA)
Latin America
Asia
Consumer Banking
$16,627
2,596
3,959
5,470
$28,652
$16,991
2,485
4,185
5,797
$29,458
(2)%
4
(5)
(6)
(3)%
North America
Europe, Middle East and Africa (EMEA)
Latin America
Asia
Institutional Clients Group
$(22,477)
5,592
3,812
5,256
$(7,817)
$(3,040)
4,235
4,206
8,339
$13,740
North America
Europe, Middle East and Africa (EMEA)
Latin America
Asia
Global Wealth Management
$9,295
604
357
2,345
$12,601
$9,790
543
373
2,292
$12,998
Corporate/Other
Total Citi from Continuing Operations
(850)
$52,793
(752)
$78,495
NM
32%
(9)
(37)
NM
(5)%
11
(4)
2
(3)%
(13)
(33)%
2007
$2,713
232
1,233
496
$4,674
%
Change
NM
NM
(60)
(35)
(96)%
$(4,529)
(475)
300
1,151
$(3,553)
$780
(122)
660
839
$2,157
NM
NM
(55)
37
NM
$(20,471)
(1,102)
1,292
406
$(19,875)
$(6,733)
(1,900)
1,630
2,848
$(4,155)
NM
42
(21)
(86)
NM
2008
$(529)
(117)
491
321
$166
$968
84
56
(17)
$1,091
(954)
$(23,125)
4,410
Discontinued Operations
$1,415
77
72
410
$1,974
(32)%
9
(22)
NM
(45)%
(1,661)
43
$2,989
NM
628
NM
$3,617
NM
Total Citi
$(18,715)
Earnings per Share from Continuing Operations
$(4.72)
$0.59
NM
Earnings per Share
$(3.88)
$0.72
NM
NM Not Meaningful.
12
Schedule D
SUMMARY OF REVENUE MARKS IN SECURITIES AND BANKING
$ millions
4Q’08
Net write-downs on sub-prime related direct exposures
$(4,582)
Write-downs, net of hedges, on Alt-A mortgages
(1,319)
Write-downs on SIV assets
(1,064)
Write-downs on commercial real estate positions
(991)
Downward credit value adjustment related to exposure to monoline insurers
(897)
Write-downs, net of underwriting fees, on highly leveraged finance commitments
(594)
Write-downs on ARS proprietary positions
(307)
CVA on Citi Liabilities at Fair Value Option
1,981
Total
$(7,773)
13
Schedule E
Schedule of Sub-Prime Related Direct Exposures in Securities and Banking
The following table sets forth Citi’s sub-prime related direct exposures in Securities and Banking,
comprised of CDO super senior exposures and Lending and Structuring exposures.
September 30,
2008
Exposures
In billions of dollars
Fourth Quarter
2008
(1)
Write-downs
Fourth Quarter
2008
Sales/Transfers/
Restructurings
Liquidations/
Repayments
December 31,
2008
Exposures
Direct ABS CDO Super Senior Exposures:
Gross ABS CDO Super Senior Exposures
$25.7
$18.9
9.4
Hedged Exposures
6.9
Net ABS CDO Super Senior Exposures:
ABCP
(2)
$13.3
1.1
High grade
$(3.1)
(0.4)
$(0.3)
$9.9
(3)
0.1
0.8
(3)
(0.2)
1.3
0.0
Mezzanine
1.7
(0.3)
ABS CDO-squared
0.1
(0.1)
(0.0)
$16.3
$(3.9)
$(0.3)
$0.1
$(0.0)
$(0.0)
$0.0
2.1
(0.5)
(0.2)
1.3
(0.3)
0.7
Total Net ABS CDO Super Senior Exposures
(4)
$12.0
Lending & Structuring Exposures:
CDO warehousing/unsold tranches of ABS CDOs
Sub-prime loans purchased for sale or securitization
Financing transactions secured by sub-prime
1.1
$(0.7)
$(0.5)
$2.0
$19.6
(5)
Total Exposures
(0.1)
$3.3
Total Lending and Structuring Exposures
Credit adjustment on hedge counterparty exposure
(3)
$(4.6)
$(0.9)
$14.1
(6)
$(0.9)
Total Net Write-Downs
$(5.6)
(1) Includes net profits associated with liquidations.
(2) Consists of older vintage, high grade ABS CDOs.
(3) Includes $63 million recorded in credit costs.
(4) A portion of the underlying securities were purchased in liquidations of CDOs and are being managed and sold in the trading book.
As of December 31, 2008, $227 million relating to deals liquidated were held in the trading book.
(5) Comprised of net CDO Super Senior exposures and gross Lending and Structuring exposures.
(6) FAS 157 adjustment related to counterparty credit risk.
Note: Totals may not sum due to rounding.
The ABCP and CDO-squared component of Citi’s CDO Super Senior sub-prime direct exposures are subject to valuation based on an intrinsic cash flow
methodology and not based on observable transactions, other than losses associated with liquidations. During the course of the fourth quarter inputs used
for the purposes of estimation have been modified to reflect market developments. The methodology takes into account both macroeconomic factors,
including estimated housing price adjustments over the next four years, unemployment rates, interest rates and their volatility, and mortgage performance
data, and microeconomic factors, including loan attributes, such as age, credit scores, documentation status, loan-to-value (LTV) ratio, and debt-to-income
(DTI) ratio. In addition, the methodology takes account of estimates of the impact of geographic concentration of mortgages, estimated impact of reported
fraud in the origination of sub-prime mortgages and the application of discount rates for each level of exposures.
The High Grade and Mezzanine component of the Super Senior sub-prime direct exposures are valued based on transactions in the underlying collateral.
This change was made because the High Grade and Mezzanine positions are now largely hedged by short positions that are valued based on observable
transactions, and there were a number of liquidations of high grade and mezzanine positions during the third quarter.
Estimates of the fair value of the ABCP and CDO-squared Super Senior exposures depend on market conditions and are subject to further change over
time. In addition, while Citi believes that the methodology used to value these exposures is reasonable, the methodology is subject to continuing
refinement, including as a result of market developments. Further, to the extent that observable transactions in respect of some or all of these ABCP and
CDO-squared exposures are occurring or occur in the future, these observable transactions, rather than estimates, could be used to determine fair value.
Most of the lending and structuring direct sub-prime exposures are fair valued based on observable transactions and other market data. The majority of
such exposures are classified as Level 3 assets.
Securities and banking also has trading positions, both long and short, in U.S. sub-prime residential mortgage-backed securities (RMBS) and related
products, including ABS CDOs that are not included in these figures. The exposure from these positions is actively managed and hedged, although the
effectiveness of the hedging products used may vary with material changes in market conditions.
14
Schedule F
SUMMARY OF PRESS RELEASE DISCLOSED ITEMS ($MM)
See Schedule E for sub-prime related direct exposures in securities and banking
4Q’08 (In Millions of Dollars)
Pre-tax
Impact
Restructuring Charges
$(1,970)
Income
Statement Line
After-tax
Impact
Segment/Region
$(1,217)
Expenses
All Citi
NAM Impairment Charge
(563)
(363)
Expenses
Securities and Banking / Asia
Reserve for customer settlements
in Japan consumer finance
(174)
(113)
Revenues
Consumer Banking / Asia
ARS Settlement
(173)
(105)
Revenues
Securities and Banking & GWM /
North America
Gain on sale of Citi Global Services
Limited
263
192
Revenues
Corporate / Other
Tax benefit relating to CFJ
restructuring
n/a
994
Taxes
Gain on sale of German retail
banking operations (1)
n/a
3,919
Discontinued
Operations
Global Cards, Consumer Banking
and ICG / Asia
n/a
(1) Includes the fourth quarter impact of a benefit of a currency hedge put in place post-signing.
After-tax
Impact
Income
Statement Line
$534
$336
Revenue
Global Cards, Consumer Banking,
Transaction Services / EMEA, Latin
America, Asia
Gain on sale of ownership in
Simplex Investment Advisors
313
106
Revenue
Securities and Banking (2) / Asia
Gain on sale of MasterCard shares
152
99
Revenue
Global Cards, Transaction Services /
North America
Reserve for customer settlements
in Japan consumer finance
(188)
(122)
Revenue
Consumer Banking / Asia
Visa Inc.-related litigation reserve
(306)
(199)
Expenses
Global Cards, Transaction Services /
North America
Repositioning charges
(539)
(337)
Expenses
All Citi
4Q’07 (In Millions of Dollars)
Gain on Visa Inc. shares
Pre-tax
Impact
(1)
(1)
Net of minority interest.
(2)
Was reclassified from Consumer Banking to Securities and Banking.
15
Segment/Region
Non-GAAP Financial Measures
The following are measures considered “non-GAAP financial measures” under SEC guidelines:
1)
2)
3)
4)
5)
6)
7)
Citi expenses excluding restructuring and repositioning charges
Citi expenses excluding restructuring and repositioning charges, an intangible asset impairment charge related to Nikko Asset
Management, and a Visa-related litigation reserve
Global Cards revenues on a managed basis.
Asia Consumer Banking revenues excluding Japan Consumer Finance.
Asia Consumer Banking net credit losses excluding Japan Consumer Finance.
Asia Consumer Banking net credit loss ratio excluding Japan Consumer Finance.
Asia Consumer Banking net income excluding Japan Consumer Finance.
The Company believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance
comparability of those results in prior periods as well as demonstrating the effects of unusual gains and charges in the quarter. The Company
believes that a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. The
Company believes that investors may find it useful to see these non-GAAP financial measures to analyze financial performance without the
impact of unusual items that may obscure trends in the Company’s underlying performance.
Reconciliation of the GAAP financial measures to the aforementioned non-GAAP measures follows:
4Q
2008
GAAP Citi Expenses
Excluding restructuring and repositioning charges
3Q
2008
4Q’08 vs. 3Q’08
% Change
$15,348
($ in millions)
$14,425
6%
(1,970)
Non-GAAP Citi Expenses
(459)
$13,378
Excluding restructuring and repositioning charges
4Q
2007
4Q’08 vs. 4Q’07
% Change
$15,348
GAAP Citi Expenses
(4)%
4Q
2008
($ in millions)
$13,966
$16,100
(5)%
(1,970)
(539)
Non-GAAP Citi Expenses
$13,378
$15,562
(14)%
GAAP Citi Expenses
$15,348
$16,100
(5)%
Excluding restructuring and repositioning charges
(1,970)
Excluding an intangible asset impairment charge related to NAM
(563)
Excluding a Visa-related litigation reserve
--
Non-GAAP Citi Expenses
(539)
-(306)
$12,815
$15,256
(16)%
$4,612
$6,279
(27)%
2,426
1,200
Non-GAAP Global Cards Revenues
$7,038
$7,479
(6)%
GAAP Asia Consumer Banking Revenues
$1,103
$1,422
(22)%
67
126
$1,036
$1,296
$466
$416
305
314
$161
$102
GAAP Global Cards Revenues
Excluding the impact of securitizations
Excluding Japan Consumer Finance Revenues
Non-GAAP Asia Consumer Banking Revenues
GAAP Asia Consumer Banking Net Credit Losses
Excluding Japan Consumer Finance Net Credit Losses
Non-GAAP Asia Consumer Banking Net Credit Losses
GAAP Asia Consumer Banking Net Credit Loss Ratio
3.59%
GAAP Asia Consumer Banking Net Income
0.82%
$796
16
58%
$384
74 bps
66 bps
184
$251
Non-GAAP Asia Consumer Banking Net Income
$200
(545)
Excluding Japan Consumer Finance Net Loss
12%
14.66%
1.48%
Non-GAAP Asia Consumer Banking Net Credit Loss Ratio
2.85%
14.62%
Excluding Japan Consumer Finance Net Credit Loss Ratio
(20)%
NM
(35)%
17
